Fed, European Banks Face Off on New Rule

European banks and the Federal Reserve began a chess match over new rules for U.S. units of foreign banks, with overseas firms expected to try and limit the impact and Fed officials vowing to prevent banks from evasion.

The jockeying over the Fed's new rules could further ruffle tensions between the U.S. and Europe over what European officials see as a unilateral abandonment of a globally agreed-to approach for financial...